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The  Opportunity 
of  Chicago  to  Be= 
come  a  Great  City 

—  I 

1901...,.  1903V 


EDMUND    J.    JAMES 


A 
DISCUSSION 

OF  THE 

TRACTION 
QUESTION 

I.  The   Present    Crisis. 

II.  The    Street   Car  Sit= 


EDMUND  J.  JAMES. 

III.  How  a    Similar  City  Solved  a  More  Dif- 

ficult  Problem. 

IV.  What  Should  Be  the  Street  Car  Policy  of 

Chicago? 


Reprinted  from  THE    WORLD  REVIEW 

THE  WORLD  REVIEW  COMPANY 

Publishers 
FINE  ARTS  BUILDING  CHICAGO 

Five     Cents    a     Copy 


I. 
The  Present  Crisis. 


The  citizens  of  Chicago  are  now;  confronting  one 
of  the  greatest  crises  in  the  history  of  this  community. 
The  approaching  election  is  one  of  the  most  impor- 
tant ever  held  in  this  city,  and  on  its  issue  turn  some 
«of  the  gravest  interests  which  have  ever  hung  upon 
-jthe  decision  of  the  ballot. 

All  such  general  elections  are,  it  is  true,  of  impor- 
tance— nay,  of  great  importance.  During  the  term  of 
;any  mayor  or  council  difficult  questions  of  city  ad- 
:ministration  may  come  up  for  discussion  and  settle- 
ment, and  at  any  time  a  policy  may  be  adopted 
fraught  with  great  injury  or  benefit  to  the  community. 
.At  any  time,  moreover,  there  is  almost  limitless  oppor- 
tunity of  improving  municipal  conditions  open  to  an 
.intelligent  and  honest  mayor  and  council. 

But  it  is  also  true  that  there  come  times  in  the  life 

-of  cities,  as  of  individuals,  which  have  a  special  and 

peculiar  relation  to  their  present  and  future  welfare. 

There  come  tides  in  the  affairs  of  every  community 

which  taken  at  their  flood  lead  on  to  fortune,  but 

which  being  allowed  to  ebb  may  not  return  for  many 

a  long  year  to  come.     Such  a  tide  is  now  flowing  in. 

,  the  affairs  of  this  city,  and  its  flood  will  be  reached 

•  during  .the  next  two  years.     Of  all  the  pressing  and 

important  issues  before  the  city — and  there  are  many 

— none  is  so  pressing  or  important  as  that  of  local 

transportation. 

During  the  year  1903  the  franchises  of  the  most  im- 
portant street  car  railways  in  Chicago  will  expire.  For 
the  first  time  since  1863,  or  one  may  perhaps  better 
.say,  since  1859,  the  city  will  find  itself  in  possession 


of  comprehensive  rights  over  its  own  streets.  It  may 
now  for  the  first  time  in  this  generation  determine 
anew  the  conditions  on  which  private  corporations 
may  use  its  streets  for  the  purpose  of  supplying  local 
transportation  to  its  citizens;  and  in  doing  so  it  will 
settle,  for  weal  or  for  woe,  the  fate  of  the  next  genera- 
tion in  this  matter. 

The  importance  of  this  question  can  scarcely  be 
over-estimated.  Its  economic  and  social  importance 
is,  if  anything,  exceeded  by  its  moral  importance;  its 
direct,  by  its  indirect,  significance.  As  to  its  direct 
economic  aspect,  any  one  will  admit  that  the  relation 
of  cheap,  convenient,  rapid  and  complete  means  of 
local  transportation  to  the  health,  comfort,  business 
and  industrial  efficiency  of  the  community  is  funda- 
mental. And  now  we  have  the  chance  for  the  first 
time  in  forty  years  to  insist  that  the  local  means  of 
transportation  shall  be  organized  and  managed  pri- 
marily in  the  interest  of  the  great  masses  of  the  public; 
that  the  cheapest  and  best  facilities  shall  be  afforded 
in  this  respect  which  the  advance  of  modern  science 
and  invention  has  made  possible. 

But  the  indirect,  moral  importance  of  a  correct 
solution  of  this  problem  is  equally  great.  Our  Ameri- 
can cities  have  become  so  in  the  habit  of  seeing  them- 
selves and  their  interests  made  the  sport  and  football 
of  stock  jobbers  and  promoters  that  our  citizens  have 
almost  come  to  despair  of  ever  being  able  to  protect 
properly  the  public  interest.  They  are  so  in  the  habit 
of  seeing  their  own  sworn  representatives  betray  and 
sell  out  for  political  or  pecuniary  considerations  the 
highest  welfare  of  the  community;  they  have  become 
so  accustomed  to  seeing  the  great  public  service  cor- 
porations openly  and  brazenly  buying  their  privileges 
from  the  city  councils,  paying  not  to  the  city  or  its 
treasury,  but  to  private  individuals,  either  for  private 
or  political  use,  the  sums  necessary  to  secure  favor 
and  protection,  that  a  sort  of  pessimism — a  kind  of  dry 
rot  of  hopelessness  that  things  can  ever  become  bet- 
ter— seems  to  have  seized  them,  paralyzing  all  the 
efforts  in  the  direction  of  honest  or  efficient  govern- 
ment. 


Chicago  now  has  an  opportunity  to  revive  the 
drooping  spirits,  not  only  of  its  own  citizens,  but  of 
those  of  every  other  American  city,  by  showing  that 
it  is  still  possible  by  a  vigorous  effort  to  rescue  our 
municipalities  from  the  grasp  of  corrupt  and  aggres- 
sive private  organizations  and  by  putting  honest, 
courageous  and  able  men  in  office  to  protect  and  ad- 
vance the  public  interest. 

The  proper  solution  of  this  problem  will  contribute 
enormously  toward  the  solution  of  all  other  similar 
problems.  It  will  in  so  far  teach  the  corporations  once 
for  all  that  their  only  hope  of  doing  business  with  the 
city  is  to  offer  adequate  and  honest  service  for  a  rea- 
sonable price.  It  will  turn  their  attention  from  corrupt 
deals  with  political  managers  to  an  honest  attempt  to 
give  the  public  the  very  best  service  for  the  very  low- 
est price,  and  thus  transfer  this  whole  branch  of  mod- 
ern enterprise  from  politics,  where  it  should  not  be,  to 
business,  where  it  belongs. 

The  gas  question,  the  electric  lighting  question,  and 
}  every  other  similar  problem  will  enter  a  new  and 
higher  phase  if  this  street  car  question  is  correctly 
solved.  Nay,  an  entirely  new  era  will  be  opened  in 
every  other  branch  of  public  administration  the 
instant  it  is  made  plain  by  our  method  of  solving  this 
problem  and  by  the  results  we  may  obtain,  that  the 
public  service  corporation  has  been  retired  from  the 
field  of  illegitimate  politics. 

No  other  great  American  city,  and  but  few  foreign 
cities  of  equal  size,  have  had  any  such  opportunity  as 
has  come  to  Chicago.  Will  it  prove  equal  to  the 
occasion? 

The  city  will  have  practically  a  free  hand  to  adopt 
a  wise  and  far-reaching  policy  in  this  whole  question. 
The  expiration  of  the  franchises  leaves  the  city  free 
either  to  enter  into  relations  with  the  existing  com- 
panies, if  they  offer  reasonable  terms,  or  to  grant 
privileges  to  new  companies  organized  to  compete 
with  the  existing  companies  for  these  franchises.  Or, 
if  the  present  bill  advocated  by  the  Street  Car  Com- 
mission now  before  the  legislature  becomes  a  law,  the 


city  may  construct  and  operate  a  system  of  its  own,  or 
construct  the  same  and  lease  its  operation  to  private 
companies,  if  it  be  found  impossible  to  make  any 
other  equitable  and  reasonable  arrangement.  It  is 
thus  in  a  position,  if  it  will  promptly  adopt  an  intelli- 
gent and  courageous  policy,  to  solve  this  question  in 
a  manner  conducive  to  all  interests  concerned. 

But  in  this,  as  in  everything  else,  eternal  vigilance  is 
the  price  of  success.  It  is  unreasonable  to  expect 
private  corporations  desiring  to  secure  these  leases  to 
be  unduly  concerned  about  the  interests  of  the  city. 
They  have  enough  to  do  to  look  after  their  own,  and, 
it  is  the  business  of  the  city,  in  the  same  way,  to  look 
out  for  its  interests.  The  existing  corporations,  or 
new  ones  which  may  be  formed  to  compete  with  them, 
for  this  service,  will  secure  (and  very  properly,  too) 
the  ablest  men  they  can  find  to  represent  th~—  i  their 
boards  of  directors.  And  they  will  spare  no  expense 
(and  no  one  can  reasonably  object  to  th  )  ^  retain 
the  ablest  lawyers  in  the  country  as  their  counsel. 

All  this,  however,  is  an  added  reason  wny  the.  city 
should  do  likewise;  why  it  should  see  to  it  that  its 
board  of  directors — the  City  Council  and  the  Mayor 
—shall  be  composed  of  equally  able  men,  who  shall 
be  honest,  intelligent  and  courageous  in  safeguarding 
the  public  interests.  And  just  as  the  ci'  ,  has  no  equit- 
able claim  to  representation  in  the  boards  of  direc- 
tors of  the  corporations,  so  the  corporations  have  no 
equitable  claim  to  any  special  repres  ntation  in  the 
City  Council  or  the  Mayor's  c'  air. 

Their  effort,  therefore,  if  it  is  being  made,  as  some 
claim,  to  elect  councilmen  pledged  to  their  interest 
is  an  endeavor  to  corrupt  public  administration  at  its 
very  fountain-head  and  should  be  rebuked. 

The  question  of  the  next  Mayor,  therefore,  is  a  very 
important  one,  and  no  man  should  be  elected  to  that 
position,  who  has  not  a  perfectly  unequivocal  record 
on  this  question ;  who  has  not  staked  his  sacred  honor 
in  behalf  of  maintaining  the  interests  of  the  public  at 
every  point,  and  who  has  not  given  evidence  by  his 
previous  work  of  intelligence  and  of  courage  in  rep- 


resenting  those  interests  against  all  possible  combina- 
tions to  overthrow  them.  He  should  be  a  man  before 
whom  the  companies  would  not  dare  to  lay  proposi- 
tions which  are  at  any  point  aimed  at  the  exploitation 
of  the  city's,  interest.  He  himself  should  be  as  Caesar's 
wife  was,  absolutely  above  suspicion. 

The  Mayor,  however,  is  of  less  importance  in  this 
contest  than  the  Council.  In  our  system  of  city  gov- 
ernment the  Mayor  is  indeed  a  positive  force  in  the 
actual  administration;  but  rather  a  negative  force  in 
any  constructive  policy.  He  may,  it  is  true,  by  his  veto 
prevent  a  job,  and  from  this  point  of  view  his  position 
is  one  of  great  power,  but  he  has  little  means  of  en- 
forcing an  active  and  aggressive  constructive  policy 
against  the  will  of  the  council.  In  such  matters  the 
Council  is  by  far  the  more  important  element,  and  it 
is  just  this  kind  of  work  which  we  have  before  us 
now. 

The  whole  attitude  of  the  city  and  the  City  Council 
and  the  Mayor  toward  this  question  of  the  public 
service  corporations  should  be  radically  changed. 
Thus  far  we  have  been  content,  as  a  rule,  with  waiting 
until  the  corporations  desirous  of  securing  privileges 
from  the  city  indicated  what  they  wished;  or  at  the 
most,  we  have  gone  to  the  extent  of  asking  them  what 
they  desired,  and  have  then  given  them  as  nearly  as 
possible  everything  that  they  demanded. 

In  other  words,  so  far  as  this  point  is  concerned, 
the  city  should  take  the  same  attitude  as  any  great  pri- 
vate corporation;  that  is,  get  the  work  which  it  needs 
done  on  the  best  possible  terms  by  others,  provided 
those  terms  are  reasonable;  but  if  reasonable  terms 
cannot  be  obtained,  then  undertake  the  work  itself. 
There  is  little  doubt,  however,  fortunately  for  us,  that 
if  this  policy  were  adopted  the  city  would  quickly  find 
private  corporations  able  and  willing  to  comply  with 
all  reasonable  demands. 

We  must  not  lose  sight  of  the  fact  that  under  the 
present  circumstances  it  is  far  more  to  the  interest  of 
the  city  than  of  the  existing  corporations  to  have  this 
constructive  work  undertaken  as  soon  as  possible  and 


pushed  as  rapidly  as  circumstances  may  permit.  The 
interest  of  the  present  companies  lies  in  doing  nothing 
if  they  cannot  get  what  they  want;  for,  although  they, 
know  that  if  nothing  is  done  they  will  have  no  rights 
in  the  streets  after  July  I,  1903,  yet  they  also  know 
that  in  that  case  they  will  not  be  driven  out  of  the 
streets;  for  that  would  mean  that  everybody  in  Chi- 
cago would  have  to  walk,  and  rather  than  walk  for  any 
great  length  of  time  the  public  would  insist  that  the 
Council  should  give  to  the  companies  the  franchises 
which  they  desire  on  their  own  terms.  This  method 
is  an  old  and  well-tried  device  on  the  part  of  shrewd 
parties  for  obtaining  privileges  by  force  which  they 
could  not  otherwise  get.  Proper  safeguarding  of  the 
public  interest,  therefore,  means  in  this  case,  that  this 
question  should  be  taken  up  immediately,  and  that  the 
policy  indicated  above  should  be  aggressively  pushed 
through  to  success. 

The  existing  Street  Railway  Commission,  or  a  sim- 
ilar one  containing  the  same  members,  and  perhaps 
other  members  of  the  Council,  should  be  enlarged  by 
the  addition  of  competent  engineers,  able  lawyers  and 
shrewd  business  men — all  beyond  suspicion  of  repre- 
senting anything  but  the  public  interest.  It  should  be 
supplied  with  the  requisite  funds  to  examine  this 
question  in  every  detail  and  to  employ  expert  engi- 
neer and  legal  service.  It  should  draft  as  a  result  of 
its  study  and  report  to  the  Council  a  model  contract 
betweeen  the  city  and  any  corporations  asking  for 
these  franchises.  If,  as  a  result  of  reasonable  negotia- 
tions, no  offer  can  be  obtained,  the  city  should  con- 
struct the  system  lines  itself  and  lease  them  to  private 
parties,  or  if  no  agreement  can  be  made  on  this  basis, 
operate  the  lines  itself.  There  is  little  doubt,  however, 
that  such  a  reasonable  arrangement  can  be  made.  Pri- 
vate capital  would  be  found  in  abundance  to  compete 
for  this  opportunity. 

This  plan,  however,  is  dependent  for  its  success  on 
securing  the  right  kind  of  a  Council,  and  to  this  prob- 
lem the  voter  must  give  his  earnest  attention.  He 
should  study  the  record  of  every  man  on  this  subject 


who  is  up  for  the  Council.  Every  individual  candidate 
should  be  required  to  declare  himself  on  this  subject, 
and  no  man  should  be  voted  for  who  has  not  a  well- 
known  reputation  for  probity  and  faithfulness  to  his 
pledged  word.  No  man  suspected  of  any  connection 
with  any  corporation  asking  for  such  privileges  should 
be  considered  an  available  candidate. 

In  this  work  the  Municipal  Voters'  League  is  per- 
forming a  most  useful  service.  It  is  investigating 
and  from  time  to  time  publishing  the  record  of  every 
candidate  for  the  Council.  The  thoughtful  and  patri- 
otic citizen  should  study  its  recommendations  care- 
fully. It  is  to  be  hoped  that  the  League  will  combine 
its  bold  and  uncompromising  policy  and  take  upon 
itself  also  the  work  of  making  these  candidates  declare 
in  unmistakable  terms  their  attitude  on  this  question, 
giving  us  at  the  same  time  its  own  estimate  of  the 
probability  of  each  candidate's  redeeming  his  promise. 

With  an  attitude  such  as  this,  we  can  secure  a  good 
Council,  and  by  a  good  Council  is  meant  not  merely 
an  honest  one,  but  an  intelligent  and  courageous  one, 
whose  members  will  not  content  themselves  with 
merely  rejecting  unsatisfactory  offers  by  private  par- 
ties, but  will  themselves,  after  careful  investigation, 
indicate  the  lines  along  which  propositions  must  be 
framed  in  order  to  be  acceptable. 

Such  a  Council  will  secure  for  us  either  cheaper 
fares,  or  increased  compensation,  or  improved  facili- 
ties (such  as  more  frequent  cars  and  more  extensive 
transfers);  or  greater  comfort  and  convenience,  or 
greater  safety  (such  as  the  substitution  of  the  under- 
ground for  overhead  trolley,  or  of  storage  battery  cars 
for  both);  one  or  more,  or  all  of  these  advantages  in 
the  best  combination  possible — and  all  with  a  due 
regard  for  private  and  vested  interest.  Such  a  Council 
will  be  as  incapable  of  using  its  power  to  browbeat 
and  harass  a  private  company  merely  for  the  sake  of 
"striking"  it  for  funds  as  it  will  be  of  selling  out  the 
public  interest  to  groups  of  stock-jobbing  promoters 
in  return  for  private  compensation — either  pecuniary 
or  political. 

Such  a  Council  will  solve  this  question  and  pave  the 


way  for  the  solution  of  all  the  other  vexed  questions  of 
our  present  city  politics,  and  we  shall  have  the  satis- 
faction not  only  of  having  solved  this  particular  ques- 
tion in  a  proper  manner,  not  only  of  having  put  all 
other  city  questions  in  the  way  of  a  satisfactory 
advance  toward  solution,  but  also — no  mean  result- 
of  having  vindicated  the  power  of  our  American  cities 
to  safeguard  the  public  interest  without  in  any  way 
infringing  on  legitimate  private  interest.  We  shall 
thus  set  a  new  pace  in  this  respect  for  all  other  Ameri- 
can communities,  and  shall  have  contributed  a  great 
share  toward  rescuing  our  American  cities  from  the 
deserved  odium  which  their  slipshod  and  corrupt 
administration  has  brought  upon  them. 


II. 
The  Street   Car   Situation  in  Chicago 


In  my  former  article  the  statement  was  made 
that  of  all  the  pressing  questions  now  before  the  peo- 
ple of  Chicago — and  their  name  is  legion — none  is 
more  urgent  than  the  relations  of  the  street  car  com 
panics  to  the  city.  This  arises  not  only  from  the  gen- 
eral importance  of  improved  means  of  local  trans- 
poration  to  this  community,  but  especially  be- 
cause of  the  early  expiration  of  the  franchises  oi 
the  existing  companies,  whereby  this  question,  which 
has  long  been  chronic,  now  becomes  highly  acute, 
Something,  therefore,  must  be  done.  Either  the  fran- 
chises of  the  present  companies  must  be  renewed, 
or  similar  privileges  must  be  granted  to  new  com- 
panies, or  the  city  itself  must  undertake  the  construc- 
tion and  operation  of  a  system  of  street  railways.  The 
third  alternative  is  practically  excluded  under  prevail- 
ing conditions — except  as  a  very  last  resort.  Either 
the  first  or  second  method  must  be  adopted.  Which 
shall  it  be? 

It  appears  at  first  blush  as  if  the  simplest  thing 
were  to  renew  the  franchises  of  the  companies  now 
operating.  They  can  certainly  afford  to  offer  better 
terms,  if  they  will,  than  new  companies ;  and  if  they 
do  offer  better  terms,  their  conditions  should  cer- 
tainly be  accepted. 

It  will  not  do,  however,  to  take  it  for  granted  that 
they  will  offer  of  their  own  free  will  the  best  conditions 
which  the  city  should  obtain.  That  would  be  expecting 
too  much  of  such  corporations.  They  are  not  organ- 
ized primarily  to  give  the  City  of  Chicago  the  best 
possible  transportation  for  the  lowest  possible  price, 
but  rather  for  the  purpose  of  making  the  largest  pos- 
sible profits  for  their  stockholders  out  of  this  busi- 

10 


ness.  It  would  be  unreasonable  to  expect  anything 
else  from  them.  The  managers  of  these  companies 
are  looking  out  for  the  interests  of  their  stockholders, 
and  that  is  fair  and  right — nay,  it  is  their  highest 
duty.  But  let  the  city,  on  the  other  hand,  look  out 
for  its  interests  also. 

Now  what  are  the  considerations  which  the  citizen 
should  keep  in  mind  in  arriving  at  a  conclusion  on 
this  important  question  of"  what  the  city  may  fairly 
ask  of  the  companies  ? 

In  the  first  place,  he  should  remember  that  his  own 
welfare  as  well  as  that  of  the  city  at  large  demands 
the  most  careful  regard  for  vested  interests  and  the 
rights  of  private  property.  The  City  of  Chicago 
can  get  no  advantage  from  a  brutal  use  of  its  authority, 
or  of  its  vantage  ground  to  harass  or  exploit  any  pri- 
vate interest,  which  would  at  all  make  up  for  the 
injury  which  would  be  done  to  the  fair  name  of  the 
city  by  any  unreasonable  disregard  of  existing  legal  or 
equitable  rights,  whether  of  individuals  or  corpora- 
tions. This  fact  is  fundamental,  and  must  be  ever 
kept  in  sight.  Any  wild  talk  about  the  necessity  of 
resorting  to  lynch  law,  such  as  was  heard  a  few  years 
ago ;  any  appeal  to  violent  action  on  the  part  of  the 
city  ought  to  be  severely  condemned  by  thoughtful  and 
law-abiding  citizens,  even  though  they  may  very  prop- 
erly feel  that  the  rights  of  the  city  have  not  been  alto- 
gether respected  by  past  or  present  street  car  com- 
panies. 

Now  the  first  thing  which  strikes  the  citizen  who 
tries  to  arrive  at  clear  and  just  conclusions  on  this 
subject  is  that  owing  to  the  apathy  or  indifference  of 
the  community,  or  the  ignorance,  short-sightedness  or 
corruption  of  its  representatives,  no  means  has  been 
provided  for  taking  the  very  first  step  in  this  process 
in  any  direct  way.  In  order  to  know  what  demands 
are  reasonable,  it  is  necessary  to  know  first  of  all  what 
is  the  actual  cost  of  construction  and  operation  of  street 

11 


car  lines  in  this  city.  Now  we  have  had  horse  cars 
in  Chicago  for  forty  years,  cable  cars  for  twenty  years 
and  electric  cars  for  ten" years,  yet  we  do  not  know 
definitely  what  the  cost  of  any  of  these  various  modes 
of  transit  is.  The  only  exact  way  of  finding  out  would 
be  through  access  to  the  books  of  these  companies, 
provided  the  books  had  been  kept  honestly  and  effi- 
ciently. Such  access  the  companies  have  uniformly 
refused  to  give  the  authorized  agents  of  the  city.  In 
this  action  it  is  true  they  are  certainly  within  their 
legal  rights,  for  neither  at  the  time  when  the  first 
franchises  were  granted  for  twenty-five  years  in  1858, 
nor  at  the  time  when  they  were  renewed  for  twenty 
years  in  1883,  was  the  community  sufficiently  wide- 
awake, or  its  representatives  sufficiently  far-sighted, 
courageous  or  honest,  to  insist,  as  they  ought  to  have 
done,  that  the  books  of  the  companies  should  be  always 
open  to  the  inspection  of  properly  certified  public  audi- 
tors. 

In  the  very  first  step,  then,  we  are  compelled  to 
resort  to  outside  sources  for  information  as  to  the 
most  fundamental  facts  of  the  situation,  and  if  our 
reasoning  based  on  these  facts  should  be  faulty — to 
the  disadvantage  of  the  companies — the  latter  have 
only  themselves  to  thank.  It  must  be  said,  however, 
that,  judging  from  the  history  of  other  American 
communities,  as  well  as  of  this,  there  is  not  the  least 
danger  of  the  city  taking  any  undue  advantage  of  the 
corporations,  since  the  American  community  is  very 
long-suffering  indeed ;  in  fact,  far  too  long-suffering. 

A  second  circumstance  strikes  the  honest  and 
thoughtful  citizen  at  the  very  outset  of  this  inquiry, 
and  that  is,  that  owing  to  the  apathy  or  ignorance  of 
the  community  in  former  years,  or  the  ignorance, 
shortsightedness  or  corruption  of  its  representatives, 
the  companies  have  been  able  to  cloud  and  befog  the 
real  issues  by  raising  a  great  alarum  about  the  com- 
prehensive and  permanent  rights  which  have  been 

12 


granted  to  them  in  the  streets  of  Chicago. 

The  story  is  a  long  and  complicated  one,  but  a 
glance  at  it  is  necessary  in  order  to  appreciate  the 
gravity  of  the  present  situation. 

The  first  street  car  franchises  were  granted  by  the 
city  in  1858  for  the  term  of  twenty-five  years  and 
"thereafter  until  the  city  should  purchase  the  equip- 
ment and  the  plant"  of  the  respective  companies.  As 
it  seemed  doubtful  whether  the  city  had  authority 
under  its  charter  to  grant  such  franchises,  the  legisla- 
ture in  the  next  year  confirmed  the  grant.  But  this 
grant,  requiring  the  purchase  of  equipment  and  plant 
if  the  city  desired  to  resume  the  franchise,  was  lim- 
ited to  a  very  few  lines  and  a  comparatively  short 
mileage — not  over  ten  miles  altogether.  With  this 
exception,  all  grants  by  the  city  were  made  either  for 
twenty-five  or  twenty  years,  with  no  mention  of  pur- 
chase. In  all  such  cases,  of  course,  expiration  of 
franchises  means  simply  that  the  companies  must 
vacate  the  streets — it  being  presumed  that  they  have 
already  received  in  the  shape  of  profits,  a  reasonable 
return  on  the  actual  capital  invested  and  in  addition 
the  full  amount  of  the  capital  originally  and  subse- 
quently invested — a  supposition  more  than  fulfilled  in 
the  case  of  all  the  leading  companies  in  question. 

The  corporations  of  forty  years  ago,  however,  were 
not  satisfied  with  this.  Like  those  of  a  more  recent 
time,  they  went  to  the  legislature  for  additional  privi- 
leges, and,  in  spite  of  the  governor's  veto,  who  at 
that  time  was  with  the  people,  and  in  spite  of  the  pro- 
tests of  the  citizens  of  Chicago,  they  secured  the  pas- 
sage of  a  law  extending  their  charters  and  their  privi- 
leges for  ninety-nine  years  from  the  beginning  of  the 
franchises — that  is,  until  1958.  This  was  an  "Allen 
Bill" — still  more  iniquitous  and  disregardful  of  the 
rights  of  the  people  than  the  famous  bill  of  1897. 

The  constitution  of  1870  and  the  Horse  and  Dummy 
Act,  passed  in  pursuance  thereof,  practically  repealed 

13 


the  ninety-nine  year  act,  so  far  as  subsequent  grants 
were  concerned,  and  all  charters  since  that  time  have 
been  for  twenty  years. 

The  city  has  always  claimed  that  the  ninety-nine 
year  act  was  unconstitutional  from  the  beginning,  and 
that,  consequently,  no  rights  could  vest  under  it.  But 
when  the  original  franchises  expired  in  1883  the  city 
was  embroiled  with  the  companies  in  a  dispute  over 
certain  taxes  which  the  city  had  levied  on  the  cars 
of  the  companies.  The  latter  claimed  rights  under 
the  ninety-nine  year  act.  Francis  Adams,  afterwards 
Judge  of  the  Circuit  Court,  and  Julius  S.  Grinnell, 
then  City  Attorney,  in  an  opinion,  apparently  pre- 
pared by  Grinnell,  held  for  the  companies  and  against 
the  city.  Grinnell  afterwards  became  counsel  for  the 
Chicago  City  Railway  company.  The  reasoning  in 
this  opinion  may  be  inferred  from  the  statement,  that 
the  original  right  of  purchase  subsequently  confirmed 
by  the  legislature,  was  invalid  because  the  rule  is  "that 
a  municipal  corporation  cannot  bind  the  people  by  a 
contract  foreign  to  the  purpose  of  its  creation,  or 
which  not  being  in  terms  authorized  is  against  public 
policy!" 

In  their  shortsighted  eagerness  to  settle  the  tax  diffi- 
culty, or  in  fear  that  the  courts  were  so  controlled  by 
corporation  decisions  that  they  would  hold  for  the 
companies  in  case  of  a  test,  or  in  their  haste  to  secure 
the  extension  of  the  cable  lines,  or  actuated  by  baser 
motives,  the  city  authorities  consented  to  extend  the 
franchises  for  the  then  existing  companies,  and  prac- 
tically on  their  own  terms,  for  another  twenty  years, 
although  other  companies  stood  ready  to  make  much 
better  offers.  And  so  now  we  are  again  face  to  face 
with  the  same  preblem  as  twenty  years  ago — the  com- 
panies ready  to  claim  rights  for  certain  strategic  lines 
until  the  year  1958 !  In  fact,  they  have  made  contracts 
in  certain  cases  running  to  the  year  of  our  Lord  2885  ! ! 

In  the  meantime,  however,  things  have  changed  for 

14 


the  advantage  of  the  city.  The  original  franchises 
give  authority  to  use  horse  traction  only ;  so  that  even 
in  the  extremest  case  the  companies  have  merely  the 
right  to  use  cars  drawn  by  horses  only  over  a  very 
limited  mileage  until  the  year  1958 — a  right  which  it 
is  safe  to  say,  they  do  not  care  much  about,  except 
as  a  means  of  browbeating  the  city  in  the  approaching 
contest. 

The  legal  rights  of  the  city,  then,  while  tolerably 
plain,  are  clouded,  it  must  be  confessed,  by  the  claims 
of  the  companies.  There  is  a  sufficient  shadow  of 
justification  for  them  to  confuse  the  minds  of  the 
honest  citizens  who,  while  desiring  that  the  city  shall 
have  its  full  rights,  do  not  wish  to  do  injustice  to  any 
private  interest — individual  or  corporate. 

What  an  opportunity  there  is  here  for  a  weak,  cow- 
ardly, owned  or  bought  mayor  to  seem  to  be  protect- 
ing the  public  interests  to  the  utmost  of  his  ability, 
while  actually  engaged  in  selling  out  the  rights  of  the 
city  to  private  corporations  that  would  place  him  in  the 
chair  or  buy  him  after  he  takes  the  seat,  or  browbeat  or 
threaten  him  with  loss  of  future  advancement  in  case 
he  does  not  do  their  bidding! 

What  a  chance  for  a  scheming,  corrupt,  weak  or 
inefficient  council !  They  can  give  the  companies 
everything  they  wish,  while  they  are  saying  to  the 
people :  "We  are  very  sad,  but  you  see  the  law  of 
1865  or  the  agreement  of  1883,  or  the  opinion  of  the 
City  Attorney  twenty  years  ago,  has  so  committed 
the  city  that  we  are  practically  at  the  mercy  of  the 
cc-porations.  We  are  very  sorry  indeed,  but  the  fault 
is  in  our  predecessors,  not  in  us." 

It  is  plain  that  our  only  hope  in  this  situation  lies  in 
a  courageous,  honest  and  intelligent  mayor  and  council, 
who  will  be  ready  to  safeguard  the  interests  of  the  city 
by  taking  the  initiative,  and  will  not  wait  for  the  com- 
panies to  make  propositions.  Only  by  such  action  can 
the  public  welfare  be  insured. 


So  much  for  the  legal  rights ;  now  what  of  the  equit- 
able rights  ?  There  are  many  different  forms  of  street 
car  franchises,  and  there  is  a  great  dispute  as  to  which 
of  these  is  the  best  for  the  public  interest.  The  inves- 
tigation of  this  question  must  be  undertaken  in  earnest 
before  future  franchises  are  granted. 

But  we  have  thus  far  had  in  Chicago  the  twenty- 
year  franchise  without  special  compensation  to  the 
city.  This  means  that  the  company  asking  for  the 
franchise  is  willing,  in  return  for  the  right,  to  install 
and  operate  a  plant  for  twenty  years,  to  take  the  risk 
of  getting  its  money  back  in  the  enterprise.  "Getting 
its  money  back"  means  in  this  case,  receiving  by  the 
time  the  franchise  terminates,  a  fair  return  on  capital 
invested,  plus  a  sum  equal  to  the  capital  invested. 

Now  it  is  evident  that  even  if  the  company  fails  to 
make  the  anticipated  profits  the  city  is  not  bound 
through  any  principle  of  equity  or  law  to  make  this 
loss  good,  any  more  than  it  is  bound  to  make  good  the 
losses  of  grocerymen  or  dairymen,  who,  while  expect- 
ing to  make  great  profits,  have  instead  reaped  losses. 
Much  more  is  the  city  not  bound  in  absence  of  a  con- 
tract to  the  contrary,  to  add  anything  to  the  profits 
of  the  companies  by  buying  their  old  iron  and  worn 
out  cables  and  cars  after  the  companies,  in  addition  to 
reasonable  profits  on  all  capital  actually  invested,  have 
received  in  extra  profits  full  payment  for  such  a  plant. 
So  much  the  more  is  this  true  if  the  companies  in  their 
ambition  to  make  profits  have  exploited  the  public  in, 
an  undue  manner,  even  though  they  may  have  acted 
within  their  strict  legal  rights. 

Now  what  are  the  facts  about  these  last  points  ? 

It  is  plain  that  6  per  cent  is  a  reasonable  return  for 
capital  invested  in  such  sure  property  as  the  street  car 
railways  in  a  city  like  Chicago,  at  least  along  all  the 
strategic  streets.  Anything  more  than  this  may  be 
fairly  enough  considered  as  properly  belonging  to  a 
reserve  fund  or  sinking  fund,  to  replace  the  capital 

16 


invested  by  the  time  the  leases  expire,  when,  in  the 
absence  of  a  contract  to  the  contrary,  the  property 
of  the  companies  in  the  streets  becomes  worthless  to 
them,  since  the  only  rights  which  make  the  property 
of  any  value  to  them  expire  at  that  time. 

Now  the  Street  Railway  Commission  appointed  by 
the  Mayor  of  Chicago,  October  18,  1897,  investigated 
this  question  very  fully.  It  showed  that  the  Chicago 
City  Railway  company  had  paid  in  dividends  in  excess 
of  6  per  cent  during  the  years  1890-1897,  counting  ac- 
cumulations at  4  per  cent  compound  interest,  the  sum 
of  $8,469,604.63,  while  the  cost  of  duplication  of  the 
entire  plant,  with  overhead  trolley  system,  was  put  at 
$9,211,000;  that  is  to  say,  in  considerably  less  than  half 
the  time  for  which  the  franchises  ran  the  excess  of 
dividends  of  the  stock  above  6  per  cent  would  have 
almost  completely  duplicated  the  plant  in  better  condi- 
tion for  profit  earning  that  it  was  at  the  beginning. 

The  same  authority  states  that  the  capitalized  value 
of  the  dividends  in  excess  of  6  per  cent  paid  by  the 
North  Chicago  City  Railway  company  during  the  same 
years — 1890-1897 — amounted  to  $4,762,948.39,  and 
that  a  similar  sum  of  $1,105,707.13  was  paid  by  the 
North  Chicago  Street  Railway  company — a  total  of 
$5,868,655.52,  while  the  outside  cost  of  duplicating  the 
entire  plant,  with  overhead  electric  trolley,  would  be 
$5,005,000,  or  nearly  a  million  dollars  less  than  the 
capitalized  value  of  the  dividends  in  excess  of  6  per 
cent  during  the  period  of  eight  years ! 

The  West  Chicago  Street  Railway  company  system 
paid  in  dividends  in  excess  of  6  per  cent  during  the 
same  years  a  sum  whose  capitalized  value  was  $6,831,- 
639.86,  while  the  cost  of  duplication  on  the  basis  of  the 
overhead  trolley  was  estimated  at  $10,135,000. 

It  is  perfectly  plain  from  the  above  statements  that 
if  the  companies  had  done  as  they  should  have  done — 
viz.,  after  setting  aside  a  reasonable  sum  as  profits, 
had  turned  the  rest  of  the  net  income  into  a  reserve 

17 


or  sinking  fund,  they  could  have  returned  the  original 
investment  twice  over  to  the  stockholders  by  the  end 
of  the  leases,  and  still  have  had  large  sums  to  spend 
on  improvements  and  lower  fares  or  increased  com- 
pensation. 

Surely  there  is  no  ground  here  for  a  claim  that  the 
city,  in  insisting  on  its  rights,  is  unduly  exploiting  the 
street  car  companies  or  confiscating  the  hard-earned 
savings  of  street  railway  stockholders. 

According  to  the  same  reports,  the  above  compan- 
ies had  issued  in  stock  and  bonds  up  to  December  31, 
1897,  an  amount  whose  market  value  on  that  date  was 
$91,612,445,  while  the  total  cost  of  duplication  on  the 
basis  of  the  overhead  trolley  system  was  $24,351,000. 
This  reveals  the  sum  of  $67,261,445  as  the  capital  over 
and  above  the  cost  of  duplication  upon  which  these 
companies  were  paying  interest. 

If  we  disregard  market  value  and  simply  take  the 
stocks  and  bonds  at  par  value,  the  over-capitalization, 
based  on  the  cost  of  duplication,  was  $38,307,300, 
which  is  what  is  commonly  known  in  the  narrowest 
sense,  as  "water,"  or  would  be  such  if  the  business 
were  competitive. 

The  effort  of  the  companies  will  be,  of  course,  to 
make  all  this  "water"  good  at  the  expense  of  the  citi- 
zens of  Chicago,  while  it  should  be  the  effort  of  the 
city  to  keep  this  at  as  low  a  figure  as  possible,  with 
due  regard  to  all  interests  concerned. 

So  much  for  the  equitable  rights,  so  far  as  the  return 
on  capital  invested  is  concerned. 

Have  the  companies  deserved  well  of  the  city  in  other 
respects  ? 

The  secretary  of  the  present  Street  Railway  Com- 
mission, appointed  by  the  Mayor  more  than  a  year 
ago,  has  just  returned  from  an  extensive  trip  in  the 
East,  made  for  the  purpose  of  examining  the  street 
car  systems  of  those  cities.  He  is  reported  to  have 
said  that  Chicago  is  now  distinctly  at  the  rear  of  the 

is 


procession  of  the  large  American  cities,  so  far  as  the 
facilities  for  street  car  transportation  are  concerned; 
local  transit  is  dear,  the  system  of  transfers  being  ex- 
tremely limited;  it  is  slow,  it  is  uncomfortable  and 
inconvenient. 

This  is  a  serious  indictment  against  the  surface 
road  companies  of  this  city;  but  that  it  is  true,  no  one 
can  doubt  who  has  studied  the  situation  carefully. 

For  some  of  this  the  city  is  itself  undoubtedly  to 
blame.  For  much  of  it,  however,  the  companies  are 
responsible,  with  little  reason  or  justification  on  their 
part,  considering  the  enormous  profits  they  have  been 
reaping. 

It  is  a  notorious  fact  that  the  companies  have  not 
paid  anything  like  a  fair  compensation  to  the  city  for 
the  possession  of  such  valuable  privileges,  and  it  is 
also  a  notorious  fact  that  they  have  not  paid  a  fair 
rate  of  taxation  on  their  undertakings,  considered  as 
mere  business  enterprises. 

All  this,  however,  some  one  may  say  is  ancient  his- 
tory, and  so  it  is,  or  shortly  will  be;  but  ancient  his- 
tory of  an  extremely  valuable  kind  for  this  community 
to  study  and  keep  in  mind,  now  that  it  is  called  upon 
to  investigate  and  decide  anew  this  question  of  the 
future  relations  of  these  or  other  companies  to  this 
city.  Let  us  hope  such  history  shall  not  be  made 
again. 

What  was  done  twenty  years  ago,  cannot  be  undone. 
What  our  fathers  did  we  are  not  responsible  for.  But 
what  is  to  be  done  within  the  next  twenty  years,  and 
the  relation  of  this  community  to  these  undertakings 
for  a  generation  to  come  is  to  be  decided  by  us  here 
and  now. 

Let  us  take  great  care  that  our  successors  of  the 
year  1923  have  no  cause  to  attribute  to  us  cowardice, 
ignorance  or  apathy,  or  to  reflect  upon  the  courage, 
honesty  and  intelligence  of  our  representatives  in  the 
Mayor's  chair  or  in  the  Council  Chamber! 


19 


III. 

How    a    Similar    City    Solved    a    More 
Difficult  Problem. 


The  City  of  Berlin — the  capital  of  Germany — resem- 
bles in  many  respects  the  City  of  Chicago  more  closely 
than  perhaps  any  other  large  city  of  the  world.  The 
population  of  the  two  cities  is  almost  exactly  the 
same.  The  rate  of  growth  in  each  case  since  1870  has 
been  very  nearly  the  same.  The  problems  of  local 
transportation,  education,  sewerage,  housing  of 
the  people,  etc.,  etc.,  have  been  very  similar.  A 
study,  therefore,  by  either  city  into  the  meth- 
ods adopted  by  the  other  to  solve  these 
problems  cannot  fail  to  be  suggestive  and  helpful.  Ber- 
lin has  recently  been  engaged  in  an  attempt  to  revolu- 
tionize its  street  car  system  and  regulate  the  relations 
between  it  and  the  city  authorities.  An  examination  of 
the  course  of  this  struggle  and  its  results  may  be  of 
use  to  us  in  Chicago  today. 

Berlin,  like  Chicago,  was  shortsighted  enough  to 
grant  long  term  franchises  in  the  early  eighties,  with- 
out reserving  the  right  for  the  city  to  insist  on  a 
progressive  improvement  of  the  system  to  keep  it  up  to 
date ;  although  it  did  secure  a  large  return  in  the  form 
of  remuneration  to  the  city  and  for  the  public  low  fares 
— less  than  three  cents  on  the  average.  The  traction 
system  was  horses.  The  franchises  ran  until  1912. 

With  the  advent  of  electricity  in  the  latter  part  of 
the  eighties  the  demand  of  the  public  for  improved 
facilities  became  ever  more  imperative.  But  the  city, 
owing  to  the  form  of  contract  with  the  companies, 
could  not  compel  them  to  convert  horse  traction  into 
electric  traction.  The  popular  discontent  increased, 
however,  to  such  a  pitch,  and  Berlin  was  dropping  so 
rapidly  behind  other  cities  in  the  matter  of  local  trans- 

30 


portation  that  the  city  authorities  in  the  year   1895 
finally  took  up  the  matter  in  earnest. 

They  first  of  all  appointed  a  carefully  constituted 
commission  to  make  an  expert  examination  of  the-- 
whole  question.  This  commission,  after  investigating 
the  experience  of  other  cities  in  Germany  and  other 
countries,  reported  in  favor  of  a  plan  involving  the 
conversion  of  all  the  lines  from  horse  into  electric 
traction  ;  the  great  extension  of  the  system ;  a  reduction 
in  fares  and  an  increase  in  the  remuneration  paid  to  the 
city.  The  city,  as  said  above,  was  not  in  a  position  to 
force  any  action  on  the  part  of  the  companies,  since 
their  charters  ran  still  for  sixteen  years ;  and  as  their 
stockholders  were  receiving  twelve  to  fifteen  per  cent 
dividends,  they  saw  little  reason  to  change  the  situation 
unless  they  could  make  some  substantial  gain  by  it. 
And,  indeed,  they  said  at  first,  that  they  did  not  care  to 
change  at  all,  and  in  any  event  only  in  return  for 
very  decided  concessions  on  the  part  of  the  city. 

But  the  city  authorities  knew  that  the  companies 
would  like  to  change  from  horse  to  electric  traction  on 
many  different  accounts,  and  especially  because  they 
could  make  larger  profits.  The  question  then  was  to 
get  some  system  of  division  of  these  larger  profits 
between  the  city  and  the  companies  in  such  a  way  as 
to  secure  the  largest  possible  returns  to  the  city,  and 
still  persuade  the  companies  to  accept  it.  The  city  was 
in  a  position,  moreover,  to  exert  some  pressure  on  the 
companies  through  its  power  to  give  concessions  to 
competing  companies. 

it  is  not  necessary  here  to  go  into  the  details  of  this 
development.  It  is  sufficient  to  say  that  after  nearly 
three  years'  negotiations  a  contract — drawn  by  the 
city  authorities,  it  must  be  remembered,  to  protect  the 
city's  interests — was  proposed  to  the  companies,  which 
they  accepted,  and  which  now  forms  the  basis  of  the 
relations  between  the  city  and  the  companies. 

In  examining  this  agreement,  it  must  not  be  for- 

21 


gotten  that  the  city  was  in  a  far  less  favorable  position 
than  is  Chicago  today ;  for  while  the  Chicago  fran- 
chises expire  in  1903,  those  of  Berlin  had  still  sixteen 
years  to  run  when  that  city  took  up  the  question  in 
1895.  We  must  be  prepared,  therefore,  to  see  that  Ber- 
lin was  obliged  to  make  concessions  which  we  need  not 
make. 

The  city  granted,  first  of  all,  an  extension  of  the 
franchises  for  eight  years — from  1912  to  1920. 

But  in  return  for  this,  the  entire  street  plant — tracks, 
wires,  poles,  waiting  rooms,  etc.,  passes  into  the  posses- 
sion of  the  city  at  the  end  of  that  time — free  of  all 
charges  whatsoever.  The  companies  must  keep  every 
portion  of  the  conceded  lines  in  efficient  condition  until 
the  expiration  of  the  lease,  and  in  case  of  their  failure 
to  do  so  the  city  authorities  may  take  possession  of  the 
line  or  lines  and  equip  and  operate  them  at  the  expense 
of  the  companies.  This  insures  that  the  companies 
shall  not  abandon  lines  which  they  may  find  unprofit- 
able, and  also  protects  the  city  against  the  natural 
tendency  to  allow  the  lines  to  fall  into  decay  toward 
the  end  of  the  period  of  the  franchise,  as  some  of  our 
Chicago  companies  have  done. 

Moreover,  in  close  connection  with  this  is  the  further 
provision  that  when  the  companies  ask  for  and  obtain 
permission  to  use  a  street  they  shall,  within  a  reason- 
able time,  construct  and  operate  the  line,  or  the  city 
may  do  so  at  their  expense.  This  prevents  the  com- 
panies from  getting  the  right  to  use  streets  merely  for 
the  purpose  of  keeping  other  parties  out.  As  soon 
as  they  cease  to  use  the  street  for  any  reason  whatever, 
the  city  has  the  option  of  requiring  them  to  remove 
the  tracks  or  of  itself  operating  at  their  expense.  In 
the  latter  case,  the  companies  are  required  to  permit  the 
use  of  their  other  lines  to  whatever  extent  may  be 
necessary  to  enable  the  city  to  operate  these  abandoned 
lines  efficiently. 

It  will  be  seen  that  this  provision  effectually  pre- 


vents  "dead  tracks,"  "dummy  tracks,"  or  tracks  over 
which  a  car  a  day  or  a  car  a  week  is  run  in  order  to 
hold  possession  and  keep  out  competitors.  Such  non- 
•sense  as  American  cities  put  up  with  in  these  matters 
no  self-respecting  European  community  would  permit 
for  an  instant. 

Furthermore,  not  only  must  the  company  which 
obtains  permission  to  use  a  street  actually  use  it,  but 
the  city  reserves  for  itself  the  right  to  require  more 
frequent  trips,  if  in  its  judgment  the  public  interests 
require  it.  In  general,  the  time  table  of  the  companies 
must  be  approved  by  the  city  authorities  and  additional 
cars  or  more  frequent  trips  may  be  required  over  any 
and  all  lines  at  the  discretion  of  the  city. 

In  addition  the  city  may  require  the  companies  to 
construct  and  operate  an  additional  one  hundred  miles 
of  double  track  in  order  to  supplement  and  round  out 
the  existing  system.  For  any  portion  of  the  extra 
mileage  demanded  by  the  city  after  1902  it  shall  con- 
tribute a  certain  portion  of  the  cost  of  construction, 
increasing  in  amount  as  the  lease  approaches  its  ter- 
mination. 

It  will  thus  be  seen  that  the  city  protects  itself  against 
being  at  the  mercy  of  the  sloth,  whims  or  self-interest 
of  the  companies.  In  addition  the  city  reserves  to  itself 
the  right  to  grant  franchises  to  any  other  companies 
it  chooses  or  to  build  lines  itself  when  and  where  it 
desires  in  order  to  develop  properly  the  system  of  local 
transportation.  Nay,  more,  it  reserves  the  right  to  use 
the  tracks  of  the  existing  companies,  or  to  grant  the 
ri.n-ht  to  use  them  to  other  companies  up  to  a  certain 
maximum  distance — wherever  it  may  be  necessary  in 
order  to  enable  competing  companies  to  get  into  the 
heart  of  the  city. 

In  this  way,  it  has  tried  to  protect  the  community 
against  the  evil  effect  of  monopoly  and  to  ensure  the 
possibility  of  developing  the  facilities  for  local  trans- 
portation to  any  extent  desired. 

23 


It  has  also  in  this  contract  secured  substantial  con- 
cessions in  the  matter  of  fares.  Under  the  old  system 
a  scheme  of  graduated  fares — from  one  and  a  quarter 
to  six  cents  per  trip — was  in  force.  Under  the  new- 
system  a  uniform  fare  of  ten  pfennigs  (2.38  cents)  for 
a  single  trip  has  been  adopted — less  than  one-half  of 
the  Chicago  rate.  In  addition  commutation  and  school 
tickets  at  reduced  rates  are  also  sold  on  all  lines,  and 
the  city  authorities  may  require  the  running  of  work- 
men's cars  morning  and  evening  at  reduced  rates  on 
all  lines  where,  in  their  judgment,  there  is  need  for 
such  facilities.  The  system"  of  transfers,  however,  is 
not  developed  as  it  should  be  for  public  convenience. 
But  even  so,  the  saving,  as  compared  with  Chicago, 
of  over  fifty  per  cent  in  transportation  on  the  single 
trip  through  line  tickets  is  very  great. 

In  addition  to  all  the  concessions  indicated  above, 
the  companies  pay  a  remuneration  to  the  city  which 
seems  of  itself  enormous  according  to  American  ideas. 

First:  The  companies  must  pay  eight  per  cent  of 
their  gross  income  from  passenger  and  freight  traffic 
into  the  city  treasury. 

Second :  After  paying  a  twelve  per  cent  dividend 
on  existing  capital  and  a  six  per  cent  dividend  on  any 
capital  actually  invested  in  the  future  for  the  purpose 
of  converting  horse  into  electric  traction,  for  exten- 
sions, etc.,  the  companies  shall  pay  one-half  of  the 
-f  remaining  income  into  the  city  treasury.  Owing  to 
the  strictness  of  German  corporation  laws  "existing 
capital"  means  practically  the  "original  actual  invest- 
ment"— less  "water" — and  future  "capital  invested" 
means,  in  the  same  way,  capital  which  is  actually  paid 
in  by  stockholders  for  the  purpose  of  increasing  the 
plant  of  the  road. 

What  this  signifies  may  be  seen  from  the  fact  that 
if  Chicago  had  had  such  an  arrangement  since  1890 
it  might  have  reconstructed  the  whole  present  mileage 


of  the  leading  companies  out  of  its  income  and  owned 
a  modern  plant  free  of  all  charge. 

Third :  The  companies  are  furthermore  required  to 
pay  the  cost  of  paving  and  keeping  in  repair  the  street 
pavement  for  a  distance  of  thirty  centimeters  (one 
foot)  on  each  side  of  each  rail — the  pavement  to  be 
such  as  the  city  authorities  have  prescribed  for  the 
given  street.  The  city  lays  and  repairs  the  pavement 
and  renders  a  bill  to  the  companies  for  the  work. 

In  order  to  make  sure  that  the  companies  deal  fairly 
with  the  city  in  the  matter  of  division  of  net  income  the 
authorities  do  not  rely  merely  upon  the  provisions  of 
the  general  corporation  laws ;  though  these  are  far 
stricter  than  our  laws,  and  are  generally  considered  to 
be  well  enforced.  The  companies  agree  in  the  contract 
to  give  the  city  authorities  all  the  information  which 
they  may  demand  as  to  the  conversion  of  the  traction 
power  and  as  to  the  cost  of  construction  and  opera- 
tion ;  and,  in  order  to  make  assurance  doubly  sure,  they 
agree  to  permit  the  inspection  of  their  books  at  any 
time  by  a  duly  authorized  and  sworn  auditor  appointed 
by  the  city.  In  this  way  the  city  proposes,  moreover, 
to  obtain  the  information  necessary  to  enable  it  to  take 
over  the  entire  street  car  system  into  its  own  manage- 
ment at  the  expiration  of  the  leases  in  1920. 

The  contract  gives  the  city  ample  means  of  enforcing 
its  provisions  without  resort  to  the  heavy-gaited  process 
of  courts  of  justice,  and  in  all  those  cases  where  the 
city  and  companies  have  to  come  to  a  common  agree- 
ment, provision  is  made  for  the  establishment  of  a 
~ourt  of  arbitration,  to  which  the  point  in  dispute  shall 
be  submitted  and  by  the  decision  of  which  each  party 
is  bound. 

The  companies  agree,  moreover,  to  take  their  electric 
power  from  such  sources  as  the  city  shall  indicate 
and  not  to  establish  their  own  power  plants,  except 
with  the  consent  of  the  city.  This  provision  was  in- 
serted for  two  reasons :  In  the  first  place,  the  city 

25 


desires  to  limit  as  far  as  possible  the  number  of  such 
power  plants  inside  the  city,  owing  to  the  general  ob- 
jections to  their  multiplication;  in  the  second  place,  the 
city  itself  is  interested  largely  in  one  particular  plant 
and  desires  that  the  companies  shall  avail  themselves 
of  its  facilities.  This  they  have  done,  thus  enabling  the 
city  to  receive  a  large  annual  return  as  profits  on  the 
business  of  furnishing  the  companies  with  power. 
This  item  might,  therefore,  properly  enough  be  inserted 
also  under  the  head  of  remuneration. 

A  last  point  should  not  be  omitted  as  having  an 
important  bearing  in  the  remuneration  which  the  com- 
panies could  offer  the  city.  The  system  of  operation 
adopted  was  that  known  as  the  overhead  trolley  sys- 
tem— the  cheapest  of  all  existing  systems.  But  the 
companies  agreed  to  use  the  storage  battery  system  in 
the  underground  trolley  in  certain  definite  streets  or 
portions  of  streets,  and  in  addition  agreed  to  extend 
the  storage  battery  system  to  their  lines  upon  the  de- 
mand of  the  city  authorities.  This  compelled  them  to 
adopt  practically  the  mixed  system  of  storage  battery 
and  trolley,  feeding  the  batteries  directly  from  the  trol- 
ley while  running  over  the  portion  of  the  lines  equipped 
with  a  trolley,  so  as  to  make  the  trip  over  the  portions 
from  which  the  trolley  was  excluded.  This  meant  a 
large  additional  expense,  and  yet  the  companies  agreed 
to  it  as  a  part  of  the  contract  and  did  not  insist  on  a 
reduction  of  the  compensation  paid  to  the  city  on  ac- 
count of  the  provision. 

An  examination  ol  this  contract  shows,  it  seems,  that 
the  city,  considering  the  conditions  and  the  vantage 
ground  of  the  companies,  etc.,  made  a  very  good  bar- 
gain. 

But  no  sooner  had  the  bargain  been  closed  than  a 
general  outcry  was  raised  that  the  city  had  been  over- 
reached and  outwitted  in  the  negotiations.  However 
this  may  be,  certain  facts  soon  came  to  light  showing 
that  the  companies,  even  under  these  conditions,  which 

26 


they  claim  to  be  very  onerous,  had  made  a  very  good 
thing  out  of  it. 

No  sooner  had  this  contract  been  closed  than  a  num- 
ber of  companies  began  to  bid  for  additional  contracts. 
The  offers  which  the  companies  made  proved  a  great 
eye-opener  as  to  the  profits  which  the  trolley  business 
can  pay  in  modern  cities. 

The  city  transportation  commission  drafted  a  plan 
for  the  construction  of  a  complex  system  of  surface 
roads  supplementary  to  the  existing  system  and  called 
for  bids.  It  must  be  remembered  that  these  new  lines 
were,  generally  speaking,  far  less  desirable  than  those 
in  possession  of  the  existing  companies,  since  the  latter 
had  obtained  possession  of  the  most  profitable  routes 
years  before.  They  were  mostly  short  lines,  incapable 
of  reaching  the  best  termini  in  the  center  of  the  city, 
and  likely,  therefore,  to  be  far  less  profitable  than  the 
older  lines.  The  general  conditions  were  to  be  the  same 
as  those  prescribed  above  in  the  contract  with  the 
older  companies.  That  is  to  say,  the  franchises  were 
to  terminate  with  the  beginning  of  the  year  1920.  The 
street  plant  of  the  road  was  then  to  pass  into  the  hands 
of  the  city  free  of  charge.  The  lessees  were  to  assume 
similar  obligations  as  to  paving  anH  keeping  in  repair 
the  streets  occupied  by  the  respective  lines.  The  fare 
was  to  be  the  uniform  fare  of  10  pfennigs  (2.38  cents). 
The  city  was  to  have  the  right  to  prescribe  frequency  of 
trips,  etc.,  etc.  The  only  point  left  open  was  the 
further  remuneration  which  the  companies  were  willing 
to  offer  to  the  city  for  the  franchises — i.  e.,  the  propor- 
tion of  the  gross  receipts  and  of  the  net  revenue  after 
paying  six  per  cent  dividend  on  all  capital  actually 
invested.  A  large  number  of  competitors  appeared. 
After  rejecting  the  bids  of  all  those  who  were  not  able 
to  offer  reasonable  security  that  they  could  carry  out 
their  agreements,  bids  were  again  called  for  from  six 
reliable  parties. 

The  lowest  bid  made  was  fifteen  per  cent  of  the 

27 


gross  income !  One  company  offered  from  fifteen  to 
twenty-five  per  cent  of  the  gross  income,  according  as 
the  income  might  range  from  30  pfennigs  to  60  pfen- 
nigs per  car  kilometer,  or  from  10  to  20  cents  per  car 
mile ;  and  in  addition  it  offered  fifty  per  cent  of  the  net 
revenue,  after  paying  a  six  per  cent  dividend ;  sixty 
per  cent  after  paying  a  seven  per  cent  dividend  and 
seventy-five  per  cent  after  paying  an  eight  per  cent 
dividend. 

The  existing  companies  which  had  obtained  a  re- 
newal of  the  contract  and  an  extension  of  the  franchise 
for  eight  years,  as  previously  stated,  and  had  repeatedly 
declared  during  the  negotiations  that  they  could  not 
under  any  circumstances  offer  more  than  eight  per 
cent  of  the  gross  receipts,  now  came  forward  and 
offered  fifteen  per  cent  for  the  new  lines ! 

The  city  authorities,  which  had  had  in  the  meantime 
much  difficulty  in  holding  the  old  companies  to  the 
terms  of  the  new  contracts,  resolved  that  they  would 
under  no  circumstances  let  the  new  lines  to  them. 
After  careful  investigation  they  made  up  their  minds 
that,  no  matter  who  got  the  new  franchises,  the  existing 
companies  would  buy  them  out  and  thus  establish  an 
absolute  monopoly.  In  order  to  prevent  this,  the 
transportation  commission  recommended  that  the  city 
give  no  more  concessions  to  private  corporations,  but 
that  it  itself  should  undertake  the  construction  and 
operation  of  all  future  lines  within  the  city  limits. 
This  policy  was  accepted  by  the  city  council  October 
18,  1900,  by  the  overwhelming  vote  of  113  to  9. 

This  is  especially  significant  of  a  radical  change  in 
sentiment  on  the  subject  of  municipal  ownership  and 
management.  For  when  the  proposition  was  made  in 
the  council  three  years  ago  to  declare  in  favor  of  such 
a  policy  hardly  a  baker's  dozen  could  be  marshaled 
in  its  support. 

The  city  immediately  proceeded  to  act  in  accordance 
with  this  resolution.  A  permanent  street  railway  board 

28 


was  appointed  to  administer  this  department  of  city 
affairs.  It  had  no  sooner  been  constituted  than  two 
of  the  few  street  railway  lines  not  yet  in  possession  of 
the  old  companies  were  offered  to  the  city.  After  a 
lively  but  detailed  discussion  the  city  decided  January 
24,  1901,  to  purchase  the  entire  stock  of  the  company 
owning  both  lines  at  the  price  of  166  2-3  per  cent,  and 
thus  had  the  pleasure  of  buying  back  at  an  advance 
of  66  2-3  per  cent  a  franchise  which  it  had  granted 
less  than  five  years  before.  It  was  practically  com- 
pelled to  do  this,  as  these  two  lines  were  of  strategic 
importance  to  its  scheme  of  new  roads,  and  they  were 
about  to  be  sold  to  the  old  companies. 

The  final  vote  on  this  question  stood  93  to  12  in  favor 
of  the  proposition.  And  thus  the  City  of  Berlin,  much 
against  its  will,  has  embarked  on  the  policy  of  munici- 
pal ownership  and  operation  of  at  least  a  portion  of  its 
system  of  surface  roads — driven  to  it,  as  it  appears,  by 
the  difficulties  of  enforcing  contracts  with  private  cor- 
porations. Will  Chicago  be  compelled  by  similar  cir- 
cumstances to  travel  the  same  road  ?  This  will  depend 
largely  on  the  attitude  of  the  present  companies  in  the 
negotiations  for  a  renewal  of  the  franchises. 


IV. 

What  Should  Be  the  Street  Car  Policy 

of  Chicago  for  the  Immediate 

Future? 


In  view  of  our  own  experience  and  that  of  other 
cities,  at  home  and  abroad,  and  in  view  of  the  existing 
conditions  in  this  community,  what  should  be  the 
policy  of  Chicago  in  regard  to  its  street  railway  lines 
for  the  immediate  future?  It  will  be  noted  that  this  is 
a  very  concrete  and,  in  a  certain  sense,  a  narrow  and 
temporary  question.  It  is,  however,  the  very  question 
now  before  the  citizens  of  this  community  to  be  de- 
cided in  its  broad  outlines,  at  any  rate,  at  the  election 
on  next  Tuesday.  I  am  aware  that  certain  of  our 
politicians  and  certain  of  our  newspapers  have  been 
saying  that  this  question  is  not  involved  at  the  ap- 
proaching election,  since  all  parties  are  agreed  as  to 
the  main  features  of  the  solution.  This,  however,  is 
very  far  from  being  the  case.  If  certain  men — now 
candidates  for  the  City  Council — are  chosen  at  the 
next  election,  the  policy  of  the  city  will  be  very  simple 
— viz.,  let  the  companies  have  the  franchises  on  their 
own  terms,  provided  that  they  will  make  sufficiently 
large  contributions  to  the  campaign  funds  of  certain 
party  leaders  or  sufficiently  large  contributions  to  the 
private  pockets  of  these  leaders,  or  provided  that  they 
exert  a  sufficiently  strong  influence  over  their  em- 
ployes" in  the  political  interests  of  these  same  leaders. 
It  is  certainly  the  duty  of  every  patriotic  citizen  to  see 
that  his  influence  is  thrown  against  such  candidates 
from  start  to  finish.  The  Municipal  Voters'  League 
will  assist  him  in  distinguishing  between  good  and 
bad  candidates. 

But  even  after  the  better  candidates  are  chosen  it 
will  still  be  a  difficult  question  to  decide  what  policy 

30 


should  be  adopted.  The  actual  details  of  any  policy 
can  certainly  only  be  worked  out  by  a  properly  consti- 
tuted commission,  with  adequate  time  and  means  to 
consider  all  aspects  of  the  case. 

But  it  may  be  possible  to  indicate  even  now  cer- 
tain broad  features  which  should  be  incorporated  into 
any  plan  to  be  adopted  by  the  city  in  regard  to  this 
matter. 

In  the  first  place,  except  as  a  very  last  resort,  munic- 
ipal ownership  and  management  is  excluded,  at  least 
for  the  present,  from  the  list  of  debatable  expedients. 
Time  spent  in  discussing  this  method  of  solving  the 
problem  is,  therefore,  time  wasted  and  time,  too,  which 
is  needed  for  the  consideration  of  means  which  are 
feasible.  Entirely  aside  from  the  usual  objections  to 
municipal  ownership  and  management  (and  there  are 
many  cogent  reasons  to  be  urged  against  such  a  policy 
as  a  general  solution  of  this  problem),  the  present  finan- 
cial condition  of  the  City  of  Chicago  makes  it  im- 
possible for  the  city  to  assume  any  such  large  pecun- 
iary burdens.  The  laws  as  to  taxation  and  indebted- 
ness— laws  which  could  not  be  easily  changed — 
prevent  us  from  considering  this  as  a  practical  policy. 
It  is  a  serious  question,  moreover,  whether  the  legis- 
lature would  grant  the  city  permission  to  undertake 
such  functions,  even  if  a  large  majority  of  its  citizens 
desired  such  permission.  And  in  any  case  is  it  cer- 
tain that  very  strong  opposition  would  be  made  by 
many  citizens  to  any  such  a  proposition — opposition 
which  would  certainly  be  strong  enough  to  delay  ac- 
tion far  beyond  the  time  when  this  question  should 
be  settled.  The  city  is,  for  another  strong  reason,  not 
in  a  position  to  undertake  this  function  at  present, 
since  its  civil  service  would  be  entirely  unequal  to 
mastering  such  a  problem.  We  must  acquire  exper- 
ience on  a  small  scale  if  we  wish  to  enter  upon  this 
policy.  We  must  build  and  operate  a  few  experi- 
mental lines  before  undertaking  the  management  of  a 

31 


metropolitan  system  like  that  of  Chicago  and  its 
suburbs. 

In  the  second  place,  we  should  grant  short-term 
franchises  to  the  present  companies  if  they  are  willing 
to  offer  reasonable  terms ;  and  if  they  will  not  offer 
such  terms,  we  should  offer  the  franchises  to  compa- 
nies which  will  do  so. 

I  am  aware  that  much  may  be  said  against  short- 
term  franchises,  and  if  the  question  were  an  entirely 
open  one,  I  should  be  inclined  to  favor  indefinite 
franchises,  revocable  at  the  will  of  the  city  on  tendering 
a  proper  compensation. 

But  the  question  is  not  an  open  one.  The  law  pro- 
vides for  twenty-year  franchises,  and  any  attempt  to 
change  this  law  might  give  us  a  worse  one.  The  pub- 
lic is  accustomed  to  the  idea  of  short-term  franchises. 
They  can  understand  the  main  points  of  discussion 
as  to  the  details  of  such  a  system.  And  any  attempt 
to  persuade  them  of  the  merits  of  another  system  in 
the  short  time  at  our  disposal  would  only  lead  to  con- 
fusion. 

In  the  third  place,  we  should  frame  these  new  fran- 
chises so  that,  if  the  city  desires  to  adopt  public  own- 
ership and  management  at  the  end  of  this  twenty- 
year  period,  it  can 'do  so  with  a  minimum  of  trouble 
and  expense.  While  city  construction  and  operation 
is  now  practically  out  of  the  question,  it  may  be  that 
in  twenty  years  it  will  be  the  only  reasonable  and  sen- 
sible plan,  and,  if  so,  the  city  should  be  in  a  position 
to  adopt  and  pursue  a  corresponding  policy. 

This  feature  calls  for  two  important  provisions  in 
the  new  franchises :  One,  waiving  expressly  all  rights 
or  privileges  claimed  by  the  companies  under  the  so- 
called  Ninety-nine  Year  Act, — referred  to  in  a  pre- 
ceding article — and  all  rights  and  privileges  under  any 
other  act  which  would  interfere  with  the  city's  absolute 
and  unhampered  control  of  all  its  own  streets  in  the 
year  1923  and  thereafter;  the  second,  providing  that 

33 


the  entire  street  plant  of  the  companies  shall  pass  into 
the  hands  of  the  city  free  of  all  cost  at  the  expiration 
of  the  franchises,  and  that  the  right  be  reserved  to  the 
city  of  purchasing  at  an  assessed  value  the  stables, 
power  plants,  rolling  stock,  etc.  There  must  naturally 
be  associated  with  this  some  means  in  the  hands  of 
the  city  of  compelling  the  companies  to  keep  the  street 
plant,  etc.,  in  an  efficient  condition,  up  to  the  very 
end  of  the  lease. 

There  is  another  alternative — viz.,  that  the  city  shall 
waive  this  right  of  taking  over  free  of  charge  the  street 
plant  at  the  end  of  the  period  and  agree  to  pay  the 
actual  value  of  the  plant  for  operating  purposes  at 
the  time  (making  no  allowances  for  franchises,  of 
course).  This  plan  has  some  decided  advantages,  but, 
if  adopted,  the  city  should  secure  additional  and  cor- 
responding compensation,  either  in  the  form  of  re- 
duced fares  or  higher  returns  to  the  city  treasury. 

In  the  fourth  place  the  city  should  have  the  right  to 
insist  on  more  frequent  trips  and  to  make  requisite 
police  regulations  relating  to  the  heating  of  cars, 
refunding  of  fares,  and  other  reasonable  regulations, — 
including  the  fixing  of  maximum  hours  of  labor  for 
all  employes,  on  whose  faithfulness  and  ability  the 
safety  of  the  public  depends.  What  other,  if  any,  con- 
ditions relating  to  the  treatment  of  employes  by  the 
companies  should  be  introduced  into  the  contract  can 
only  be  wisely  determined  after  a  careful  investiga- 
tion into  the  desires  of  the  employers  and  employes. 
But  the  city  certainly  has  the  moral  right  to  dictate 
the  fundamental  conditions  affecting  the  life  and  safety 
of  the  public.  In  fact,  it  is  a  fair  question,  whether 
the  power  of  regulation  to  this  extent  is  not  already 
vested  in  the  city  authorities  as  a  part  of  the  police 
power. 

In  the  fifth  place  the  companies  should  be  required 
to  "get  together"  on  some  common  basis,  so  that  a 
single  fare  would,  as  far  as  possible,  take  the  traveler 

33 


from  any  point  on  any  street  car  line  within  the  city 
limits  to  any  other  point  on  any  other  line  in  the  city. 
And,  in  general,  they  should  be  held  to  work  together 
in  such  a  way  as  to  constitute  all  the  lines  within  the 
city  into  a  real  complex  or  single  system  with  the 
fullest  possible  transfer  privileges. 

From  this  point  of  view  the  suggestion  made  by 
Mr.  George  E.  Hooker,  one  of  the  ablest  students  of 
local  transportation,  is  extremely  valuable.  He  calls 
attention  to  the  absurd  policy  of  the  companies  making 
all  lines  terminate  in  the  middle  of  the  city  instead 
of  operating  them  dfrectly  through  from  north  to 
south  and  south  to  west  and  north  to  west  and  vice 
versa.  The  present  plan  is  a  mere  device  to  exact  a 
double  fare  and  it  operates  most  prejudicially  on  the 
interests  of  the  city  from  every  aspect. 

The  city  should  in  all  its  dealings  with  the  compa- 
nies keep  in  mind  the  desirability  of  extending  and 
improving  the  facilities  offered  by  its  surface  road 
system.  And  although  this  cannot  be  the  only  point 
considered.it  certainly  should  never  be  lost  sight  of. 
It  should  also  reserve  absolutely  the  right  to  grant 
new  franchises  or  to  build  its  own  lines,  without  prej- 
udice to  the  right  it  now  possesses  to  permit  two  or 
more  companies  to  occupy  the  same  street  or  use 
the  same  tracks. 

In  the  sixth  place  the  fares  should  be  regulated 
with  due  regard  to  the  interests  of  all  classes — com- 
panies, passengers  and  taxpayers.  This  is,  in  some 
.respects,  the  most  difficult  of  all  the  matters  in  dis- 
pute. We  must  not  forget  that  it  is  impossible  for 
the  city  to  get  the  maximum  amount  of  benefit  at 
every  possible  point.  If  it  desires  the  lowest  possible 
fare,  it  cannot  get  the  highest  possible  remuneration 
for  the  city  treasury ;  or  the  greatest  extension  of  the 
transfer  system,  or  the  most  frequent  and  rapid  trans- 
portation for  the  public.  Some  people  claim  that  it  is 
possible  to  carry  passengers  for  a  straight  two-cent 

34 


fare  in  such  a  city  as  Chicago.  But  this  means,  of 
course,  on  condition  you  do  not  ask  any  special  re- 
muneration from  the  companies,  and  that  you  demand 
no  transfers,  and  that  you  will  be  content  with  a  mod- 
erate rate  of  speed  and  inferior  cars,  and  that  you  are 
willing  that  only  a  few  main  streets  shall  have  car 
lines,  and  that  routes  shall  be  short,  etc.  On  such 
terms  it  might  be  possible  to  get  even  a  cent  and  a 
half  fare. 

But,  of  course,  these  conditions  do  not  represent 
our  desires.  We  want  comfortable  cars,  rapid  trans- 
portation, long  routes,  universal  transfers  and  a  com- 
prehensive system  of  lines,  so  as  to  obtain  a  maximum 
of  convenience,  and  under  such  conditions,  we  can 
hardly  expect  the  absolutely  minimum  fare. 

It  would  certainly  seem  as  if  we  should  have  much 
lower  fares  in  the  City  of  Chicago.  If  a  German  com- 
pany can  offer  to  the  City  of  Berlin  for  the  franchise 
of  an  inferior  line  25  per  cent  of  the  gross  income 
and  75  per  cent  of  the  net  income  beyond  an  8  per 
cent  dividend,  besides  handing  over  the  entire  street 
plant  at  the  end  of  twenty  years,  free  of  cost,  to  the 
city,  and  all  on  a  fare  of  less  than  two  and  a  half 
cents,  surely  we  have  good  reason  to  expect  far  more 
in  all  these  respects  from  our  Chicago  companies 
than  we  have  thus  far  secured.  On  the  other  hand, 
we  must  remember  that  what  we  take  in  lower  fares, 
we  cannot  have  in  other  things.  On  no  one  point  in 
this  whole  question  is  the  sentiment  of  the  public 
so  important  as  in  the  matter  of  fares.  My  own  feel- 
ing is  that,  on  the  whole,  the  city  has  more  to  gain 
in  the  near  future  from  the  advantages  of  remunera- 
tion to  the  city  treasury,  of  increased  facilities,  of  more 
comprehensive  transfers,  etc.,  etc.,  than  it  has  from 
lower  fares.  But  this  is  a  question  which  calls  for 
much  more  careful  examination  than  it  has  thus  far 
received,  and  such  a  commission  as  is  proposed  could 
do  this.  If  the  mass  of  the  people,  who  patronize 

35 


the  street  cars  really  desire  a  four-cent  fare,  we  should 
give  it  to  them  and  should  be  willing  to  sacrifice  some 
of  the  other  advantages  which  might  be  gained  on  the 
basis  of  the  higher  fare.  There  is,  however,  little  evi- 
dence at  present  that  there  is  any  such  demand  for  a 
lower  rate. 

It  is  said  with  much  force  that  to  permit  the  com- 
panies to  charge  a  five-cent  fare  when  they  could  do 
the  business  for  four  cents,  merely  to  turn  this  one 
cent  into  the  city  treasury,  is  a  form  of  taxation,  and 
one  of  the  most  odious  of  all ;  because  it  taxes  people, 
not  according  to  what  they  possess  or  enjoy,  but  ac- 
cording to  what  they  must  do  or  have.  Such  a  tax 
represents  a  levy  of  $6.00  per  year  on  the  wages  of 
a  shop  girl,  equal  to  an  income  tax  of  more  than  two 
per  cent,  and  a  tax  which  is  progressive  in  weight,  as 
the  income  decreases, — the  most  objectionable  of  ail 
income  taxes.  It  is  difficult  to  answer  this  objection 
on  any  ground  but  convenience.  Most  taxes  unfor- 
tunately rest  more  heavily  on  the  poor  than  on  the 
rich — on  those  who  have  not,  than  on  those  who  have. 
But  no  tax  is  fruitful  which  does  not  reach  some  ar- 
ticle of  common  consumption,  and  that  means  some 
article  which  people  of  moderate  incomes  use  in  larger 
relative  proportions  than  those  of  larger  incomes.  The 
way  out  of  this  is  to  see  that  the  better  situated  classes 
are  held  to  stricter  payment  of  the  taxes  levied  spe- 
cifically on  them.  It  must  not  be  forgotten,  moreover, 
that  this  extra  money  may  and  should  be  used  for 
the  purpose  of  making  the  city  a  pleasanter  place  for 
the  mass  of  the  people  to  live  in — that  mass  which 
must  pay  this  tax.  It  would  mean  better  paving,  bet- 
ter water  supply,  better  lighting,  cleaner  streets,  more 
numerous  and  more  convenient  parks,  etc.,  etc.  This 
difficulty  may  also  be  met  to  some  extent  by  a  sort  of 
compromise,  i.  e.,  by  providing  for  a  cheaper  fare  in 
the  early  morning  and  late  afternoon  hours. 

In  the  seventh  place  the  city  treasury  should  receive 

36 


a  cash  remuneration  from  the  companies.  This  is  on 
the  whole,  as  said  above,  a  function  of  the  fare  and 
varies  not  only  with  it  but  also  with  the  other  condi- 
tions which  the  city  may  make  as  to  transfers,  and 
other  forms  of  increased  facilities  or  greater  comfort 
and  convenience.  Allowing  that  the  five-cent  fare  is 
to  remain  it  would  seem  from  all  the  evidence  now 
offered  by  American  and  foreign  cities  that  the 'com- 
panies should  be  able  to  pay  a  straight  20  per  cent 
of  their  gross  income  into  the  city  treasury  provided 
other  conditions  be  not  made  too  onerous. 

This  question  of  amount  of  compensation  is  a  local 
one  to  be  decided  finally  by  local  conditions.  Even 
the  experience  of  other  American  cities,  to  say  noth- 
ing of  the  European  cities,  cannot  be  decisive  in  this 
matter.  Our  local  companies  have  not  been  willing  to 
give  us  the  facts  necessary  to  an  absolutely  final  con- 
clusion on  this  point.  But  the  Street  Railway  Com- 
mission of  1897,  before  referred  to,  stated  as  a  result 
of  its  very  detailed  and  conservative  investigation 
that  the  three  leading  systems  then  in  operation  in  the 
city  could  have  paid  20.57  Per  cen^  of  their  gross  re- 
ceipts for  the  years  1890-1897  into  the  city  treasury 
and  still  have  declared  6  per  cent  dividends,  and  there 
is  little  doubt  that  they  could  do  much  more  now.  It 
is  stated  that  the  average  fare  collected  in  Buffalo  is 
3.6  cents.  A  company  recently  asking  for  a  franchise 
in  that  city  offered  to  sell  tickets  at  the  rate  of  three 
for  ten  cents,  good  for  the  hours  of  working  people's 
travel  and  for  school  children. 

But  whether  20  per  cent  be  the  rate  charged  or  25 
per  cent,  or  15  per  cent,  or  10  per  cent — and  that  is  a 
matter  calling  for  careful  investigation — a  certain  per- 
centage of  gross  receipts  should  be  required  first  of 
all.  • 

I  am  aware  that  many  objections  may  be  urged  to 
such  a  system.  It  is  not-by  any  means  ideal.  In  fact, 
it  is  from  many  points  of  view  quite  the  opposite. 

37 


It  acts  under  certain  circumstances  to  discourage  ex- 
tensions and  the  development  of  new  territory.  Thus 
if  a  company  can  barely  get  a  return  on  a  certain 
stretch  of  line  without  paying  any  such  tax  it  must 
wait  until  the  probable  return  is  sufficient  to  pay  this 
tax  also  before  it  can  build  and  operate. 

On  the  other  hand,  this  is  almost  the  only  form  of 
compensation  which  is  simple  and  easily  ascertainable. 
No  juggling  of  accounts  short  of  absolute  dishonesty, 
such  as  would  send  a  man  to  the  penitentiary,  can  con- 
ceal or  cover  up  the  item  of  gross  receipts.  It  is, 
moreover,  a  tolerably  good  system  as  applied  to  lines 
already  profitable,  or  certain  to  be  profitable,  and  of 
this  character  are  all  the  leading  lines  in  Chicago. 

Of  course  there  are  other  forms  of  compensation 
which  might  be  properly  enough  adopted  either  in 
lieu  of,  or  in  combination  with,  either  or  all  of  the 
foregoing  methods.  Thus  the  companies  might  be 
required  to  pave  or,  better,  pay  the  cost  of  paving, 
the  space  between  the  tracks  or  between  the  curbs  of 
the  streets  occupied  by  the  respective  lines.  They 
might  be  required  in  addition  to  clean  the  streets 
from  curb  to  curb.  Or  a  percentage  of  the  net  income 
might  be  demanded  instead  of,  or  in  addition  to,  a 
certain  percentage  of  gross  receipts,  etc.,  etc. 

In  this  latter  case  it  would  be  absolutely  necessary 
to  insist  on  full  reports  of  income  and  expenditure, 
and  to  reserve  to  the  city  the  right  to  prescribe  methods 
of  bookkeeping,  and  to  examine  at  any  time  through 
a  properly  authorized  auditor  all  books  and  accounts 
of  the  companies.  It  would  also  be  necessary  to  de- 
fine exactly  the  term  "net  revenue."  Publicity  of  ac- 
counts is,  indeed,  a  fundamental  requirement  to  any 
thoroughly  good  scheme  of  co-operation  between  the 
city  and  public  service  corporations.  One  other  right 
should  probably  be  reserved  to  the  city,  and  that  is  the 
right  to  require  the  companies  to  introduce  improve- 
as 


ments  into  the  operation  of  the  roads  as  rapidly  as 
they  are  fully  developed. 

Thus,  if  the  city  grants  the  right  to  use  the  over- 
head trolley  and  experience  proves  the  feasibility  and 
desirability  of  the  underground  trolley  or  storage  bat- 
tery systems,  there  should  be  some  means  of  requiring 
the  companies  to  go  over  to  these  new  methods  with- 
out having  to  wait  for  fifteen  or  ten  years  or  even  five 
years. 

It  goes  without  the  saying  that  the  city  should  insist 
upon  the  bona  fide  operation  of  all  lines  constructed 
on  penalty  of  losing  the  concession  and  being  required 
to  remove  the  tracks ;  and  also  on  the  construction 
and  operation  within  a  reasonable  time  of  all  conceded 
lines.  Obtaining  franchises  merely  for  the  sake  of 
keeping  other  parties  out  should  be  made  such  an  ex- 
pensive matter  that  no  company  would  care  to  indulge 
in  the  amusement. 

It  is  plain  from  the  foregoing  considerations  and 
from  the  considerations  presented  in  the  preceding 
papers  of  this  series  that  the  question  is  a  very  com- 
plicated one  which  must  be  settled  with  due  regard  to 
the  interests  of  all  parties  after  the  most  careful  in- 
vestigation by  an  expert  commission.  But  the  only  au- 
thorities to  provide  and  select  such  a  commission  and 
make  its  report  effective  are  the  next  Mayor  and  Coun- 
cil of  Chicago  to  be  chosen  by  the  people  of  this  city 
on  Tuesday,  April  2.  Let  every  voter  do  his  duty  and 
let  no  one  be  misled  by  the  cries  of  demagogues  or 
the  protestations  of  traction  counsel  into  believing  that 
it  makes  no  difference  who  is  chosen  at  the  next  elec- 
tion to  these  important  positions. 

And  finally  we  should  remember  that  the  class  of 
men  able  to  solve  this  street  car  problem  satisfactorily 
are  also  just  the  men  who  can  most  efficiently  deal 
with  the  other  important  questions  of  city  policy  now 
pressing  on  this  community  for  solution. 


39 


Synopsis  of  Chicago  Street 
way  Franchises  Which 
Expire  in   1903. 


The  franchises  granted  to  fifty-three  lines  by  the  city 
of  Chicago  at  various  times  and  now  operated  by  the 
Union  Traction  Company  expire  in  1903.  The  list 
includes  all  the  leading  and  crosstown  lines  on  the 
north  and  west  sides.  The  act  of  1865  is  in  force  with 
those  lines  marked  with  an  asterisk.  Secretary  George 
C.  Sikes  of  the  Street  Railway  Commission  is  the  au- 
thority quoted : 

State  street,  from  Lake  to  Clark  streets,  by  Division 
street. 

*Clark  street,  from  Washington  street  to  Fullerton  avenue. 

Clark  street,  from  Fullerton  avenue  to  Diversey  boulevard. 

Wells  street  and  Fifth  avenue,  from  Randolph  to  Clark 
streets. 

Center  street — Clark  street  to  Lincoln  avenue. 

Lincoln  avenue — Center  street  to  Belmont  avenue. 

Ashland  avenue — Belmont  to  Graceland  avenue. 

Belmont  avenue — Lincoln  avenue  to  Robey  street. 

Robey  street — Belmont  avenue  to  Roscoe  boulevard. 

Roscoe  boulevard — Robey  street  to  Western  avenue. 

Division  street — Wells  street  to  Clybourn  avenue. 

*Clybourn  avenue  line — Division  street  to  Fullerton  ave- 
nue. 

Sedgwick  street — Chicago  avenue  to  Division  street. 

*Sedg\vick  street — Division  street  to   Lincoln  avenue. 

Garfield  avenue — Lincoln  avenue  to  Racine  avenue. 

Racine  avenue — Webster  avenue  to  Center  street. 

Center  street — Racine  avenue  to  Lincoln  avenue. 

*Larrabee  street — Chicago  to  Lincoln  avenues. 

Webster  avenue — Racine  to  Lincoln  avenues. 

Sheffield  avenue — Lincoln  avenue  to  Clark  street. 

*Chicago  avenue — Clark  street  to  Larrabee  street. 

Division  street — State  to   Clark  streets. 

^Division  street — Clark  street  to  Clybourn  avenue. 


Graceland  avenue — Evanston  avenue  to  Ashland  avenue. 
Evanston  avenue — Diversey  street  to  Graceland  avenue. 
Wrightwood  avenue — Short  stretch  from  Lincoln  avenue. 
Alley — Between   Lill  and  Wrightwood  avenues,  and  be- 
tween Sheffield  and  Seminary  avenues. 

Lines  on  the  West  Side. 

*Madison  street — State  street  to  Western  avenue. 
Madison  street — Between  Western  and  Hamlin  and  Ham- 
lin and  Crawford  avenues. 

*Madison  street  loop-^-Fifth  avenue  side. 

Milwaukee     avenue     line — Between     Lake     and     Halsted 

streets,  *Halsted  street  and  North  avenue,  North  avenue 
and  Armitage  avenue. 

*Halsted  street  line — Halsted  street  loop,  Van  Buren 
side;  in  Clinton  street  from  tunnel  to  Van  Buren  street;  in 
Van  Buren  street  between  Clinton  and  Halsted  streets. 

Halsted  street — *Van  Buren  street  to  Blue  Island  ave- 
nue, and  from  Blue  Island  avenue  to  O'Neill  street,  and  the 
switch  tracks  on  O'Neill  street. 

Blue  Island  avenue — *Halsted  street  to  Fifteenth  place, 
^nd  Fifteenth  place  to  Western  avenue. 

East  and  West  Lines. 

Armitage  avenue — Milwaukee  avenue  to  Washtenaw  ave- 
nue, expired  1898. 

North  avenue — Milwaukee  avenue  to  California  avenue. 

Chicago  avenue — Milwaukee  avenue  to  Leavitt  street,  and 
Leavitt  street  to  California  avenue;  Kedzie  avenue  to  For- 
tieth avenue. 

Grand  avenu.e — Milwaukee  to  Western  avenues. 

Lake  street — Wabash  avenue  to  Union  Park  court, 
*thence  to  Western  avenue,  thence  to  Rockwell  street,  thence 
to  Homan  avenue. 

*Lake  street  loop — Randolph  street  side  and  State  street 
side. 

*Randolph  street — State  street  to  Union  park. 

*Bryan  place — Randolph  street  to  Lake  street. 

Ogden  avenue — Madison  street  to  Fortieth  avenue. 

Van  Buren  street — *State  street  to  Ogden  avenue,  Ogden 
a\  enue  to  Western  avenue. 

*Polk  street — Fifth  avenue  to  Canal  street. 

Twelfth  street — *State  street  to  Canal  street,  Canal  street 
to  Ogden  avenue,  Ogden  avenue  to  Western  avenue. 

Fifteenth  place — Dead  tracks  between  Jefferson  and  Canal 
streets. 

North  and  South  Lines. 

Fifth  avenue— *Randolph  to  Polk  streets,  Polk  street  to 
Twelfth  street  viaduct,  Randolph  street  to  Lake  street. 

Clinton  street — *Randolph     street     to     Madison     street; 


*Madison  street  to  Twelfth  street;  Milwaukee  avenue  to 
Randolph  street. 

Canal  street — Harrison  street  to  Canalport  avenue. 

Canalport  avenue — Canal  street  to  Halsted  street. 

*Jefferson  street — Van  Buren  street  to  Fifteenth  place. 

Halsted  street — *Milwaukee  avenue  to  Blue  Island  ave- 
nue, Harrison  street  to  O'Neill  street. 

Leavitt  street — Chicago  avenue  to  Grand  avenue. 

Western  avenue — Lake  street  to  Madison  street,  Madison 
street  to  Van  Buren  street. 

California  avenue-^-Armitage  avenue  to  North  avenue, 
Division  street  to  Chicago  avenue. 


4V> 


Expressions  of  Opinions 


Chicago  Tribune: 

"THE  WORLD  REVIEW,  the  new  weekly  re- 
cently started  in  Chicago  under  the  editorship 
of  Horace  M.  Rebok,  Professor  Isaac  A.  Loos  of 
Iowa  State  University,  and  Professor  John  Henry 
Gray  of  Northwestern  University,  gives  promise 
of  being  a  periodical  of  high  dignity  and  worth. 
The  first  two  numbers  have  been  edited  with 
skill  and  have  contained  articles  of  a  grade 
equal  to  that  of  the  best  monthly  reviews.  The 
articles  of  Professor  Edmund  J.  James  on  'The 
Opportunity  of  Chicago  to  Become  a  Great 
City'  are  especially  worthy  of  notice." 

Chicago  Journal: 

We  have  nothing  but  words  of  commendation 
and  encouragement  for  the  new  Chicago  paper, 
THE  WORLD  ILLUSTRATED  WEEKLY  REVIEW  , 
which  made  its  first  appearance  March  9  last 
and  has  now  reached  its  third  number. 

It  is  extremely  gratifying  that  the  courage 
and  capital  can  be  found  to  establish  so  high- 
class  a  journal  as  this  is  intended  to  be,  and 
which  it  already  shows  itself  to  be,  in  the  west. 
It  is  world-wide  in  its  scope,  and  discusses  ques- 
tions of  interest  to  readers  everywhere. 

The  managing  editor  is  Horace  M.  Rebok 
and  the  associate  editors,  Isaac  Althaus  Loos 
and  Prof.  John  Henry  Gray  of  the  Northwestern 
university.  There  is  a  Woman's  club  depart- 
ment edited  by  Mrs.  Katherine  Prindiville,  and 
an  educational  department  edited  by  Prof.  M. 
Vincent  O'Shea  of  the  University  of  Wisconsin. 

Current  events  of  importance  are  discussed 
editorially  in  a  clear  and  impartial  manner,  while 
the  contributions  thus  far  are  of  the  highest 
literary  merit  as  well  as  of  great  public  interest. 

43 


A  very  notable  and  extremely  suggestive 
series  of  articles  running  through  the  three  num- 
bers is  entitled  'The  Opportunity  of  Chicago  to 
Become  a  Great  City,'  by  Prof.  Edmund  J. 
James  of  the  University  of  Chicago. 

THE  WORLD  REVIEW  is  a  credit  to  Chicago, 
and  the  citizens  of  Chicago  will  do  themselves 
credit  by  giving  it  their  heartiest  support. 

It  is  published  by  the  World  Review  Com- 
pany, Fine  Arts  building,  Chicago. 

Chicago  American: 

"Its  first  numbers  are  excellent.  The  table 
of  contents  is  a  broad  one,  the  articles  contri- 
buted by  staff  writers  are  decidedly  of  interest 
and  well  written.  THE  WORLD  REVIEW  is  a 
distinct  success,  so  far  as  its  initial  bow  to  the 
public  is  concerned,  and  it  deserves  a  hearty 
support." — Ernest  McGaffey. 

Chicago  RecorcUHerald: 

"The  initial  numbers  of  the  THE  WORLD  RE- 
VIEW, Chicago's  new  high-class  weekly,  are 
rich  in  promise  and  fulfillment.  It  is  admirably 
edited  in  such  a  way  as  to  cover  briefly  the  chief 
matters  of  current  interest,  and  its  leading  arti- 
cles are  ably  written,  the  series  by  Professor 
Edmund  J.  James  on  'The  Opportunities  of  Chi- 
cago to  Become  a  Great  City'  being  worthy  of 
especial  commendation.  Among  the  depart- 
ments are  those  devoted  to  women's  clubs  (con- 
ducted by  Mrs.  Katherine  Prindiville),  to  educa- 
tion, to  science  and  life  and  to  athletics.  Doubt- 
less, as  the  periodical  grows,  more  space  will  be 
given  to  new  books." 

ILx-Governor  John  P.  Altgeld: 

'  'The  copies  of  THE  WORLD  REVIEW  sent  me 
are  among  the  best  and  brightest  things  in  all 
periodical  literature.  If  you  can  maintain  that 
high  standard  you  well  deserve  and  I  have  no 
doubt  will  achieve  the  greatest  success." 

44 


Professor  Charles  R.  Henderson, 
University  of  Chicago: 

"The  teachers  of  schools,  intelligent  parents 
of  aspiring  youth  will  find  in  this  magazine  the 
essential  matter  of  the  current  news,  free  from 
the  sensational  and  demoralizing  elements 
which  lower  the  value  of  daily  newspapers."  * 

Chicago  Evening  Post: 

'  'Such  a  quantity  of  good  material  is  present 
that  it  looks  as  if  THE  WORLD  [REVIEW  would 
find  the  readers  it  well  deserves  and  be  able  to 
hold  its  own  so  long  as  it  maintains  its  high 
standard." 

Chicago  Times=Herald: 

"The  magazine  is  to  be  issued  weekly,  and  its 
aim  is  to  give  in  compact  form  leading  events  of 
the  world.  The  illustrations  of  the  journal  are 
especially  fine,  the  best  one  in  this  number 
being  the  portrait  of  General  Harrison." 

Boone,  Iowa,  Daily  News: 

"Every  department  of  human  progress  is 
represented  in  such  a  way  that  the  constant 
reader  of  such  a  periodical  will  look  for  infor- 
mation on  every  live  subject  while  it  is  yet  new. 
Such  a  magazine  deserves  success." 

Judge  Marcus  Kavanaugh,  of  the 
Superior  Court  of  Cook  County, 
says: 

"Permit  me  to  congratulate  you  upon  the 
appearance  of  your  magazine  and  upon  the 
high  character  of  its  contents. 

"There  can  be  little  question  about  the  suc- 
cess of  your  undertaking  when  it  is  in  such  effi- 
cient hands  and  offers  to  the  public  so  excellent 
a  magazine." 

45 


Mrs.  Clara  M.  J.  Parson,  E,x>Presi- 
dent  of  the  State  Federation  of 
Women's  Clubs,  says: 

'  'I  am  much  pleased  with  THE  WORXD  RE- 
VIEW received.  The  entire  magazine  is  inter- 
esting to  the  club  women,  in  fact  to  all  women. 
I  believe  the  club  department  will  prove  par- 
ticularly valuable.  There  is  an  evident  under- 
standing of  the  aim  of  club  work  and  an  in- 
tention to  treat  it  with  dignity  and  fairness. 

"I  hope  you  will  succeed  and  believe  you 
will. 

"You  have  my  most  cordial  good  wishes." 

President  Chas.  F.  Thwing, 
Adelbert  College: 

"I  have  read  the  numbers  with  much  interest. 
I  am  sure  that  any  paper  which  numbers  among 
its  regular  editors  such  men  as  Professor  Gray 
and  Professor  O'Shea  is  certain  to  be  a  useful 
agent  in  the  community. ' ' 

Bishop  J.  S.  Mills,  D.  D.,  Denver: 

"Its  wide  scope,  able  articles,  literary  char- 
acter, beautiful  appearance,  and  the  well  known 
ability,  culture  and  energy  of  its  editors,  guar- 
antee its  usefulness  and  future.  May  it  be- 
come a  great  factor  in  Western  progress. ' ' 

Muncie,  Ind.,  Daily  Herald: 

"THE  WORLD  REVIEW  has  a  place  in  the 
economy  of  journalism  and  will  no  doubt 
fill  it." 


The  World  Review 


Is  an  illustrated  weekly  review  of  the  current  events 
.of  the  world.  It  is  not  a  newspaper,  but  a  journal  of 
progress  and  civilization,  high  grade  in  character,  com- 
prehensive in  scope,  and  catholic  in  spirit — just  such  a 
journal  as  is  desired  at  the  end  of  the  week  by  every 
one  disposed  to  keep  informed  of  the  march  of  events. 

Editorial  reviews  will  be  devoted  to  leading  events 
current  in  both  American  and  Foreign  affairs.  THE 
'WORLD  REVIEW  will  give  a  clear  and  comprehensive 
-statement  of  the  facts  of  current  history,  in  politics, 
economics,  religion,  education,  literature,  science  and 
iart,  and  fair  and  unbiased  comments  thereon.  Every 
issue  will  contain  a  special  feature  contributed  by  a 
scholar,  publicist  or  statesman  of  national  repute  and 
popular  favor. 

Believing  in  its  mission  THE  WORLD  REVIEW  solicits 
.jcordial  cooperation  and  support. 

Subscription  price  four  dollars  a  year ;  ten  cents  a 
copy. 


Introductory    Offer. 


We  make  an  introductory  rate,  good  until  May  1, 
as  follows  : 

One  year's  subscription,  prepaid,  -     -      $2.00 

Three  months'  .50 

These  offers  will  be  withdrawn  May  1  and  the  sub- 
scription advanced  to  list  price.  The  first  number 
appeared  March  9,  and  a  limited  number  of  each  of 
the  former  issues  are  on  hand. 

THE  WORLD  REVIEW  COMPANY. 
Chicago. 

47 


